Shareholders of Google’s parent company squash plan to disclose its gender pay data

Alphabet executive chairman Eric Schmidt was the first person to speak at the shareholders meeting. (Wu Hong/European Pressphoto Agency)

For the second year in a row, shareholders of Alphabet, the parent company of Google, voted down a proposal asking the tech giant to publish a report on possible pay disparities between its male and female employees. The vote comes at a time when the company is grappling with a federal lawsuit tied to this very issue and as the tech industry faces heightened scrutiny over gender pay, a lack of diversity and dysfunctional work environments.

Under the proposal, the company would measure and disclose how much its female employees make as a percentage of their male counterparts. The plan, put forward by Arjuna Capital, an investment firm, and other co-filers also called for the company to design a policy to tackle any gender pay disparity.

“Gender pay disparity is not only one of the biggest social justice issues of our time, it poses a risk to companies' performance, brand, and investor returns,” Natasha Lamb, Arjuna's director of shareholder engagement, said at the meeting. “This issue is particularly salient to the technology industry, which struggles to attract, retain, and move women into positions of leadership,” she said.

The board of directors told shareholders that approving the proposal would not be in the best interest of the company or its investors, according to Alphabet's 2017 statement to stockholders. Management pointed to Google's existing diversity reports and internal evaluations as sufficient measures to ensure pay equity among its staff. “Our board of directors does not believe that the proposal would enhance Alphabet's existing commitment to fostering a fair and inclusive culture,” the statement said.

Like many of its peers in the tech industry, Google produces an annual report outlining the gender and ethnic makeup of its employees. A vast majority of Alphabet's employees work for Google. But the report doesn't outline gender pay disparities. Sixty-nine percent of the company's global employees are male and 31 percent are female, according to Google' 2016 diversity report, which captured data from the year prior. But it's unclear how much female employees are paid relative to the men.

Apple, Amazon.com and Microsoft have reported on their gender pay disparity, with each company claiming a discrepancy near zero. Lamb described Alphabet as a laggard, compared with its peers, when it comes to transparency over gender pay. (Jeffrey P. Bezos, Amazon's chief executive, owns The Washington Post.)

Alphabet declined to comment.

Arjuna Capital's push for Alphabet to release its gender pay information is part of a broader campaign to address enduring gender discrimination in the American workplace. Within Silicon Valley, which generally views itself as a meritocracy, calls for improving diversity have grown louder as yearly employment reports continue to show leadership teams being dominated by men.

The calls also come as accounts of workplace harassment continue to surface. In February, former Uber employee Susan Fowler published a blog post alleging episodes of sexual harassment that she said took place while she worked as an engineer at the company. Since her writing, Uber initiated several internal investigations to examine what Fowler and others described as a toxic work culture. But Uber's sexual harassment controversy is viewed by some not as an outlier but just the latest prominent example of women facing discrimination at work in Silicon Valley.

Mountain View, Calif.-based Google is facing a lawsuit from the Labor Department related to unfair gender pay. The Labor Department filed the lawsuit in January after the company refused to turn over compensation data and other info as part of a “routine compliance evaluation,” according to a Labor Department statement released in the same month. Labor Department lawyers have accused Alphabet of underpaying women, finding evidence of “extreme” gender pay discrimination. Google has denied those accusations. In a hearing last month, Alphabet said that it couldn't turn over internal wage data that the department requested because that would cost too much — $100,000 — and require hundreds of hours of work, according to the Guardian.

Alphabet is the third major tech company since 2016 to fall under Labor Department scrutiny. Palantir was accused of discriminating against Asian job applicants, and Oracle was sued for engaging in pay discrimination against female employees, as well as Asian and black workers, according to the Guardian.

At the shareholder meeting, Lamb also presented a shareholder proposal for Google to analyze its role in the spread of misleading and fabricated news stories. With management's blessing, that proposal also failed. Another plan presented by NorthStar Asset Management would have given stockholders equal voting power. That was defeated, as well.